BEIRUT — For Syria's divided and beleaguered rebels, the creeping realization that there will not be a decisive Western military intervention on their behalf is a huge psychological blow.

President Bashar Assad's regime has gained strength, largely because the world community is concerned that if he is toppled the result may be an Islamist Syria in the grip of al-Qaida.

The immediate result has been an uptick this week in fighting between moderate and jihadi rebels.

The long-term outcome is likely to be a prolonged war of attrition that continues the slow destruction of Syria as a coherent state and further fans the flames of sectarian hatred and extremism in a turbulent Middle East.

Only two weeks ago, the Obama administration appeared poised to launch a U.S. military strike against the Syrian regime in response to the Aug 21 chemical weapons attack it says was launched by Assad's forces, killing hundreds of civilians in opposition-controlled areas near Damascus.

President Barack Obama reversed course after an ambitious agreement between the U.S. and Russia calling for an inventory of Syria's chemical weapons program within a week, and for all its components to be removed from the country or destroyed by mid-2014.

Assad immediately signed on, and on Friday sent the Organization for the Prohibition of Chemical Weapons an "initial declaration" outlining Syria's weapons program.

The agreement abruptly reshuffled the cards, baffling opposition forces who had held out hope that U.S.-led strikes would help tip the scales in the country's deadly stalemate. The conflict, now in its third year, has killed more than 100,000 people and uprooted millions of people from their homes.

Obama warned in August 2012 that any deployment of the Syrian government's chemical weapons stockpiles was a "red line" that would bring harsh consequences. Now, the realization that even a sarin attack the U.S. says killed more than 1,400 people would not trigger military action has left rebels feeling bitter and powerless, and is likely to strengthen extremist trends in rebel ranks.

While the U.S. and Russia, a staunch Assad ally, have stepped up efforts to hold a peace conference for Syria, the Russian deal makes it less likely the Syrian sides will agree to talk. Opposition forces say the agreement effectively legitimizes Assad's regime, at least until mid-2014 when chemical weapons stockpiles are supposed to have been destroyed. Presidential elections are due around the same time, and Assad has suggested he may run again.

"This deal puts the regime front and center in the international diplomatic process," said Randa Slim, a scholar at the Washington-based Middle East Institute. That makes it less likely Assad will feel the need to engage in issues dealing with a political transition.

"It also pushes the armed opposition groups away from seeking a deal that they believe will not favor them in this present configuration of Syrian actors," she said.

Opposition forces say that by agreeing to relinquish his chemical weapons stockpile, Assad successfully removed the threat of U.S. military action while giving up very little in exchange. Unlike the regime's warplanes, which have pushed back rebel advances and pummeled opposition-held territory, chemical weapons are not seen as crucial to the regime's survival or military strategy.

The focus on diplomacy, which is likely to drag out the war, bolsters the jihadi narrative that the West is not interested in a rebel victory after all.

"Assad has been rewarded for using chemical weapons, rather than being punished," said veteran Syrian opposition figure Kamal Labwani.

"It is a depraved decision that will reflect in more extremism on the ground," he said, pointing to the rapid proliferation of al-Qaida militants and the uptick in rebel infighting in the past week.

On Wednesday, gunmen from the Islamic State of Iraq and the Levant, an al-Qaida offshoot, overran a town near the border with Turkey after raging battles during which they expelled fighters from the mainstream Western-backed Free Syrian Army.

The fighting died down Thursday after a cease-fire was reached with the extremists, who have sought to expand their influence across opposition-held territory in the country's north. Syria's main opposition group in exile, the Syrian National Coalition, issued a strongly worded statement saying the jihadis' push to establish an Islamic state undermines the rebels' struggle for a free Syria.

Labwani said the world is now witnessing the birth of an "Islamic, extremist state capable of destabilizing countries from Pakistan to North Africa."

"We are the biggest losers in all of this, the people who held up the banner of democracy, civil society and freedom," Labwani said.

Bruce Hoffman, director of the Center for Security Studies at Georgetown University, said Syria has become more central than Iraq to al-Qaida's brand.

"It brings al-Qaida within striking distance of the United States' three biggest allies in the region: Turkey, Jordan, and Israel," he said.

As for the rebel infighting, he said that any suggestion the rebels would purge their ranks of extremists was "wishful thinking."

Nizar al-Hrakey, the Coalition's representative in Doha, Qatar, said the U.S. retreat from military action proves there isn't a genuine will by the international community to remove Assad, for lack of alternatives.

The U.S. and Russia, he charged, have given Assad's regime new life "at the expense of the Syrian people's blood."

Marie Harf, deputy spokeswoman for the U.S. State Department, sought to debunk such accusations.

"Clearly the regime has responsibilities here ... mainly the responsibility to acknowledge their weapons and the stockpiles, and to provide security for inspectors to actually inspect them and ultimately remove them for destruction," she said this week in Washington.

"But that doesn't mean Assad gets to stay."

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EDITOR'S NOTE – Zeina Karam is Chief of Bureau in Beirut and has covered Syria since 1996.